Dr. Richard Smith made me look like a fool... And it did me a lot of good.
Before he laid down the hammer on me, he buttered me up...
He started out by telling me that if a subscriber had followed my investment recommendations since the inception of my True Wealth newsletter in 2001, they would have beaten the overall stock market (the S&P 500 Index).
Coming from him, that's big news. As I've said in the past, Richard knows numbers. He has built a career on them – crunching data to create simple, useful tools for individual investors.
According to Richard, once subscribers who followed my advice got past the starting year of True Wealth – when I was more conservative than the overall stock market and underperformed a bit – they would have remained ahead of the S&P 500 ever since.
That was the good news. Then, he hit me with the rest...
"Steve, subscribers who put $1,000 into each recommendation you made would have generated $40,000 following your advice. The thing is, if you had done one thing differently, your readers would have made more than $90,000 in profits."
My heart sank... I felt like I had accomplished something great. We invested conservatively. We had an exit strategy to prevent big losses. And it worked!
Yet Richard showed me that one simple change would have delivered more than double the profits...
What could I have done differently?
"Your exit strategy wasn't good enough," Richard told me. "You often used a simple 25% trailing stop to protect your downside risk. And sometimes you sold discretionarily – not using a system. Those discretionary sales were often too early. Those two things hurt you."
I thought I was being conservative for my subscribers. But Richard sees it differently...
"The one thing that would have made a huge difference – that would have doubled your profits – was if you had simply used a volatility-based trailing stop, instead of a fixed 25% trailing stop."
Once he showed me that, I immediately shifted over to using volatility-based trailing stops in my True Wealth newsletter. This kind of stop adjusts its percentage based on the stock's fluctuations in volatility (or risk). It helps you get out of your investments at the right times.
This week, Richard showed me another simple thing I can do.
It has nothing to do with adding leverage, or trading options on my original recommendations. It is simply a different way to follow my advice... a way to increase your capital gains by strategically investing more money in some positions, and less in others.
"What is it?" I asked.
"You will find out tonight," Richard told me...
Well, all right then. I look forward to tonight.
At 8 p.m. Eastern time, Richard will sit down with me and Porter Stansberry for a live event, where he'll reveal this missing piece.
You can listen in to find out how his strategy could have "juiced" the recommendations in my True Wealth letter... and how you can safely make more money with your existing portfolio.
I hope you can join us. The details are below...
Good investing,
Steve
Editor's note: Richard says investors need to take one critical action right now – no matter whose stock recommendations you follow... no matter the size of your portfolio... no matter if you're bullish or bearish. So tonight at 8 p.m. Eastern time, he's joining Steve and Porter Stansberry to share all the details. You can tune in to this live event for free – but you must reserve your spot. Click here to learn more.
Further Reading
Yesterday, Richard shared another powerful investing strategy. "It points to where opportunity exists in the moment," he says. "I'll use it to show you a corner of the market with major profit potential right now..." Read more here: Two Steps to Choosing the Best Stocks... in Any Market Environment.
"By sticking to our exit plan, my readers made A LOT of money in a stock that ultimately went nowhere," Steve writes. Learn more about this simple step to making better trades right here: This Secret Turned a 'No Gain' Stock Into a Triple-Digit Winner.
Investors often think that to produce massive returns, you have to be more active in investing. But Richard believes you should do the exact opposite. He explains...
A MASSIVE BUYBACK GROWS EVEN BIGGER
Today's chart shows the benefits of owning shareholder-friendly companies...
Regular DailyWealth readers know we love companies that reward their shareholders. Businesses can do this in two ways: by growing dividends, and by buying back their own shares. As Steve explained back in March 2015, buybacks reduce the number of shares outstanding. It's like cutting a pizza into six slices instead of eight... The pizza is the same size, but your slice is now larger.
Consumer-electronics giant Apple (AAPL) rewards its shareholders both ways... The company recently completed a massive $210 billion share-buyback plan that started in 2012. And it's ready for more... Apple just added another $100 billion to that plan. It also announced it would boost its quarterly dividend by 16% to 73 cents per share. That's nearly 70% higher than it was five years ago.
As you can see below, Apple shares jumped after the news to a new all-time high. They're up 21% over the past year. Apple continues to reduce the size of its "pizza," and shareholders are reaping the rewards...
